A Classroom Experiment on Exchange Rate Determination with Purchasing Power Parity
We develop a classroom experiment on exchange rate determination appropriate for undergraduate courses in macroeconomics and international economics. Students represent citizens from different countries and need to obtain currency to purchase goods. By participating in a sealed bid auction to buy currency, students gain a better understanding of currency markets and the determination of exchange rates. The implicit framework for exchange rate determination is one in which prices are perfectly flexible (in the long run) so that purchasing power parity (PPP) prevails. Additional treatments allow students to examine the impact of transport costs, nontradable goods and tariffs on the exchange rate and to explore possible deviations from PPP.
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://irving.vassar.edu/VCEWP/VCEWP.htm
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bradley T. Ewing & Jamie B. Kruse & Mark A. Thompson, 2004. "Money Demand and Risk: A Classroom Experiment," The Journal of Economic Education, Taylor & Francis Journals, vol. 35(3), pages 243-250, July.
- Brauer, Jurgen & Delemeester, Greg, 2001. " Games Economists Play: A Survey of Non-computerized Classroom-Games for College Economics," Journal of Economic Surveys, Wiley Blackwell, vol. 15(2), pages 221-36, April.
- Lisa R. Anderson & Sarah L. Stafford, 2005.
"Does Crime Pay? A Classroom Demonstration of Monitoring and Enforcement,"
17, Department of Economics, College of William and Mary.
- Lisa R. Anderson & Sarah L. Stafford, 2006. "Does Crime Pay? A Classroom Demonstration of Monitoring and Enforcement," Southern Economic Journal, Southern Economic Association, vol. 72(4), pages 1016–1025, April.
- Charles A. Holt, 1999. "Teaching Economics with Classroom Experiments: A Symposium," Southern Economic Journal, Southern Economic Association, vol. 65(3), pages 603-610, January.
- Denise Hazlett & Cynthia D. Hill, 2003. "Calculating the Candy Price Index: A Classroom Inflation Experiment," The Journal of Economic Education, Taylor & Francis Journals, vol. 34(3), pages 214-223, January.
- Denise Hazlett, 2003. "A Search-Theoretic Classroom Experiment with Money," International Review of Economic Education, Economics Network, University of Bristol, vol. 2(1), pages 80-90.
- Alan M. Taylor & Mark Taylor, 2004.
"The Purchasing Power Parity Debate,"
46, University of California, Davis, Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:vas:papers:87. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sean Flynn)The email address of this maintainer does not seem to be valid anymore. Please ask Sean Flynn to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.